EX-10.1 DEVELOPMENT AGREEMENT DATED JANUARY 24, 20

 

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CONFIDENTIAL

 

                                                                    EXHIBIT 10.1

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

BRACKETS([**]), HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES ACT OF1933, AS

AMENDED

 

                              DEVELOPMENT AGREEMENT

 

      This DEVELOPMENT AGREEMENT (this "Agreement") is entered into as of

January 24, 2005 (the "Effective Date"), by and between Miltenyi Biotec GmbH,

having an address of Friedrich-Ebert-Str. 68, D-51429 Bergisch Gladbach, Germany

("MILTENYI") and ViaCell, Inc., having an address of 245 First Street, Fifteenth

Floor, Cambridge, MA 02142-1292 USA (including its Affiliates), ("VIACELL").

 

      WHEREAS, MILTENYI has expertise in providing technology and technical

development capabilities and MILTENYI has developed systems, including the

CliniMACS(R) System, for separating certain cells from a mixture containing such

cells and other cells;

 

      WHEREAS MILTENYI has expertise in U.S. regulatory matters, including

filing Master Files with the U.S. Food and Drug Administration ("FDA") and cGMP

compliance;

 

      WHEREAS, VIACELL is seeking a development partner who can develop

cGMP-cell separation reagents for use with VIACELL's stem cell selection and

amplification system and

 

      WHEREAS, the parties desire to enter into a development agreement as set

forth herein pursuant to which MILTENYI will provide certain technology and

technical development and regulatory capabilities for VIACELL by developing

certain cGMP cell separation reagents for VIACELL for purchase under a separate

Supply Agreement between MILTENYI and ViaCell, Inc.

 

      NOW, THEREFORE, in consideration of the mutual covenants contained herein,

and for other good and valuable consideration, the parties hereto, intending to

be legally bound, hereby agree as follows:

 

                                 1. DEFINITIONS

 

Whenever used in this Agreement with an initial capital letter, the terms

defined in this Section 1 shall have the meanings specified.

 

1.1 "AFFILIATE" means any corporation, firm, partnership or other entity which

directly or indirectly controls or is controlled by or is under common control

with a Party to this Agreement. "Control" means ownership, directly or through

one or more Affiliates, or fifty percent (50%) or more of the shares of stock

entitled to vote for the election of directors, in the case of a corporation, or

fifty percent (50%) or more of the equity interests in the case of any other

type of legal entity, status as a general partner in any partnership, or any

other arrangement whereby a Party controls or has the right to control the Board

of Directors or equivalent governing body of a corporation or other entity.

 

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1.2 "CELL SEPARATION KIT" means a product consisting of [**], which is

sufficient to deplete [**] and includes cGMP Cell Separation Kit.

 

1.3 "cGMP" means the current safety and performance specifications, guidelines,

and regulations with which MILTENYI's CliniMACS [**] currently comply. These

specifications, guidelines and regulations consist of the 1997 FDA document

Points to Consider in the Manufacture and Testing of Monoclonal Antibodies

Products for Human Use, the ICH harmonized tripartite guideline Q5A: Viral

Safety Evaluation of Biotechnology Products Derived from Cell Lines of Human or

Animal Origin, and the ISO standard 10993-1:1997 (E) Biological evaluation of

medical devices - Part 1: Evaluation and testing. Additionally, the manufacture,

testing and release of the CliniMACS [**], CliniMACS [**] and CliniMACS [**] are

conducted under an ISO 13485 certified quality system and the manufacture,

testing and release of CliniMACs [**] and CliniMACs [**] will also be conducted

under the same quality system as the CliniMACS [**] CliniMACS [**] and CliniMACS

[**].

 

1.4 "cGMP CELL SEPARATION KIT" means a Cell Separation Kit manufactured pursuant

to cGMP.

 

1.5 "CLINICAL STUDIES" means the clinical trials utilizing the Cell Separation

Kits.

 

1.6 "CLINIMACS BUFFERS" means the buffers developed by MILTENYI for use in the

CliniMACS System.

 

1.7 "CLINIMACS REAGENT" means MILTENYI's proprietary colloidal magnetic particle

system utilizing a monoclonal antibody developed by MILTENYI for use in the

CliniMACS system and to deplete certain cells in a mixture.

 

1.8 [**] means the CliniMACS Reagent where the monoclonal antibody is an

antibody to a [**] cell surface marker.

 

1.9 CLINIMACS [**] means the CliniMACS Reagent where the monoclonal antibody is

an antibody to a [**] cell surface marker.

 

1.10 "CLINIMACS [**]" means the CliniMACS Reagent where the monoclonal antibody

is an antibody to a [**] cell surface marker.

 

1.11 "CLINIMACS [**]" means the CliniMACS Reagent where the monoclonal antibody

is an antibody to a [**] cell surface marker.

 

1.12 "CLINIMACS [**]" means the CliniMACS Reagent where the monoclonal antibody

is an antibody to a [**] cell surface marker.

 

1.13 "CLINIMACS SYSTEM" means that system developed by MILTENYI for conducting

cell separation by use of CliniMACS Reagents, CliniMACS Tubing Sets and the

Instrument.

 

1.14 "CLINIMACS TUBING SETS" means the tubing and related disposable equipment

developed by MILTENYI for use with the CliniMACS Instrument.

 

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CONFIDENTIAL

 

1.15 "CONFIDENTIAL INFORMATION" means all tangible embodiments of Technology and

all information (including but not limited to information about any element of

Technology) which is disclosed by one Party to the other hereunder except to the

extent that such information (i) as of the date of disclosure is demonstrably

known to the Party receiving such disclosure or its Affiliates, as shown by

written documentation, other than by virtue of a prior confidential disclosure

to such Party or its Affiliates; (ii) as of the date of disclosure is in, or

subsequently enters, the public domain, through no fault or omission of the

Party receiving such disclosure; or (iii) as of the date of disclosure or

thereafter is obtained from a Third Party free from any obligation of

confidentiality to the disclosing Party.

 

1.16 "DEVELOPMENT MILESTONE PAYMENTS" has the meaning set forth in Section

2.2.4.

 

1.17 "DEVELOPMENT PROGRAM" has the meaning set forth in Section 2.2.

 

1.18 "EFFECTIVE DATE" means the date set forth in the first paragraph above.

 

1.19 "INSTRUMENT" means the CliniMACS(R) instrument developed by MILTENYI for

conducting the separation of cells labeled with CliniMACS Reagent from other

cells, and consisting primarily of a magnetized column through which such cells

pass and certain related equipment or another instrument the Parties may decide

to develop at a later time.

 

1.20 "JOINT PATENT RIGHTS" means Patent Rights with respect to Joint Technology.

 

1.21 "JOINT TECHNOLOGY" has the meaning set forth in Section 4.1.3.

 

1.22 "VIACELL TECHNOLOGY" means Technology owned or controlled by VIACELL or its

Affiliates, that is useful in the Development Program, and that was conceived or

developed without contribution by MILTENYI, and independently of the MILTENYI

Technology or Joint Technology.

 

1.23 "MASTER FILE" means a Device Master File filed by MILTENYI with the FDA.

 

1.24 "MILTENYI TECHNOLOGY" means Technology owned or controlled by MILTENYI or

its Affiliates, and that was conceived or developed without contribution by

VIACELL, and independently of the VIACELL Technology of Joint Technology.

 

1.25 "PARTIES" means MILTENYI and VIACELL.

 

1.26 "PARTY" means MILTENYI or VIACELL, as appropriate.

 

1.27 "PATENT RIGHTS" means the rights and interests in and to issued patents and

pending patent applications (which for purposes of this Agreement shall be

deemed to include certificates of invention and applications for certificate of

invention and priority rights) in any country, including all provisional

applications, substitutions, continuations, continuations-in-part, divisions,

and renewals, all letters patent granted thereon, and all reissues,

reexaminations and extensions thereof, whether owned or licensed in by a Party

with the right to sublicense. As used herein, "VIACELL Patent Rights" means

Patent Rights with respect to VIACELL Technology and "MILTENYI Patent Rights"

means Patent Rights with respect to MILTENYI Technology.

 

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CONFIDENTIAL

 

1.28 "SPECIFICATIONS" are the criteria by which the Cell Separation Kit is

released and accepted, including the configuration of the packaging that

comprises the Cell Separation Kit. The criteria will be agreed to by the

Operating Committee. Such criteria may be modified by the Parties from time to

time as agreed to by the Operating Committee until MILTENYI begins any part of

the production process for product falling within the scope of Section 3.2 of

the Supply Agreement ("Second Product Shipment"), however, the Parties recognize

that VIACELL may be required to pay additional fees for any modifications to

criteria.

 

1.29 "SUPPLY AGREEMENT" means the Supply Agreement entered into between MILTENYI

and ViaCell, Inc. effective January 24, 2005.

 

1.30 "TECHNOLOGY" means and includes all inventions, discoveries, improvements,

trade secrets and proprietary methods and materials, whether or not patentable,

including but not limited to, samples of, methods of production or use of, and

structural and functional information pertaining to, chemical compounds,

proteins or other biological substances; other date; formulations; techniques;

and know-how; including any negative results. "Technology" of a Party includes

Technology owned or controlled by a Party or licensed to that Party.

 

1.31 "TERM" means the term of this Agreement as set forth in Section 6.1.

 

1.32 "THIRD PARTY" means any person or entity other than MILTENYI and VIACELL

and their respective Affiliates.

 

                             2. DEVELOPMENT PROGRAM

 

2.1 OBJECTIVE OF THE DEVELOPMENT PROGRAM. The objective of the Development

Program shall be the completion of certain technical services by MILTENYI to

develop a Cell Separation Kit for VIACELL which is sufficient to deplete [**].

 

In carrying out the Development Program, MILTENYI and VIACELL shall each use

commercially reasonable efforts to perform such tasks as are set forth to be

performed by it under the terms of this Agreement, in accordance with all

applicable laws, ordinances, rules, regulations, orders, licenses and other

requirements now in effect.

 

2.2 DEVELOPMENT PROGRAM.

 

      2.2.1 DEVELOPMENT OF CGMP CELL SEPARATION KIT. MILTENYI will use

commercially reasonable efforts to develop a cGMP Cell Separation Kit for

VIACELL based on MILTENYI Technology.

 

            (a)   The Parties agree that MILTENYI has already developed the

                  CliniMACS [**] at different fill concentrations from those

                  required for the cell Separation Kit.

 

            (b)   MILTENYI will develop a CliniMACS [**] and a CliniMACS [**]

                  for use in the Cell Separation Kit, as well as for other uses

                  by MILTENYI.

 

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            (c)   In developing the Cell Separation Kit, MILTENYI will perform

                  the specific tasks identified in Exhibit A as being the

                  responsibility of MILTENYI and will do so in the manner and to

                  the extent that it has previously done so for developing and

                  filing the Master File for CliniMACS [**]. To the extent that

                  VIACELL requests additional development work, the provisions

                  of Section 2.4 shall apply.

 

            (d)   For all CliniMACS Reagents used in the Cell Separation Kit,

                  MILTENYI will employ its protein-free manufacturing, FDA

                  accepted virus validation procedure, cell banking and

                  downstream processing experience, including QA and QC

                  experience. To the extent that VIACELL requests additional

                  development work the provisions of Section 2.4 shall apply.

 

            (e)   MILTENYI will provide VIACELL with sample [**] antibody and

                  [**] antibody to evaluate as soon as it becomes available

                  during the Development Program.

 

            (f)   VIACELL will use commercially reasonable efforts to provide to

                  MILTENYI initial product requirements for the Cell Separation

                  Kit and MILTENYI and VIACELL, via the Operating Committee,

                  will agree on the Specifications for the Cell Separation Kit

                  in the course of the Development Agreement. To the extent that

                  VIACELL requests additional development work, the provisions

                  of Section 2.4 shall apply.

 

            (g)   MILTENYI will provide VIACELL with sample Cell Separation Kits

                  in sufficient quantity for VIACELL to evaluate and will

                  provide VIACELL with final Specifications for the Cell

                  Separation Kit, as soon as they become available during the

                  Development Program. [**]. To the extent that VIACELL rejects

                  sample and/or the final Specifications, MILTENYI shall work

                  with VIACELL to develop mutually acceptable specifications

                  and/or MILTENYI shall replace the Cell Separation Kit sample

                  with product that meets such Specifications. To the extent

                  that VIACELL requests additional development work, the

                  provisions of Section 2.4 shall apply.

 

            (h)   To the extent that VIACELL requests MILTENYI to perform

                  additional work outside the scope of clauses (a) through (g)

                  of this Section 2.2.1, the provisions of Section 2.4 shall

                  apply.

 

      2.2.2 REGULATORY FILINGS. MILTENYI will prepare and file Master Files with

the FDA for CliniMACS [**] and CliniMACS [**]. MILTENYI will amend the Master

Files for the CliniMACS [**], the CliniMACS [**] and the CliniMACS [**] for the

fill concentrations required for the Cell Separation Kit. The Master Files will

be prepared in accordance with, and with the same type and scope of information

as, the Master File previously submitted by MILTENYI for CliniMACS [**] and

accepted by the FDA. To the extent that VIACELL requests that MILTENYI add

additional information to the Master Files for the CliniMACS Reagents which are

components of the Cell Separation Kit, the provisions of Section 2.4 shall

 

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apply. MILTENYI shall own and retain all rights, title and interest in and to

all regulatory filings for CliniMACS Reagents, including all Master Files.

Nothing in this Agreement shall give VIACELL the right to view or copy

MILTENYI's Master Files or excerpts of the Master Files.

 

      2.2.3 UNSPECIFIED TASKS. To the extent the manner of performing or

implementing a task is not specified in Section 2.2.1 or 2.2.2 or in Exhibit A,

the Party who is obligated to perform or implement such task shall have the

right to determine the manner of performance or implementation consistent with

the best interests of the Development Program.

 

      2.2.4 DEVELOPMENT MILESTONE PAYMENTS. In partial consideration of the

actions undertaken by MILTENYI in connection with the Development Program,

VIACELL will make the following Development Milestone Payments (by wire

transfer) to MILTENYI:

 

            (a)   [**] on the date of execution of this Agreement; and

 

            (b)   $250,000.00 (two hundred fifty thousand US dollars) within

                  fifteen (15) after MILTENYI notifies VIACELL that the Master

                  Files for CliniMACS [**] and CliniMACS [**] have been filed

                  with the FDA.

 

2.3 EXPENSES AND COSTS. Each Party shall bear its own costs and expenses

incurred in the performance of the Development Program except as otherwise

mutually agreed in writing between the Parties hereto.

 

2.4 COSTS FOR UNSPECIFIED TASKS AND OTHER ADDITIONAL WORK. VIACELL shall pay

MILTENYI at a mutually agreed rate for any work, including technical,

manufacturing, regulatory, QC and QA work, VIACELL requests that is in addition

to the work specifically enumerated in Sections 2.2.1 and 2.2.2.

 

2.5 DEVELOPMENT PROJECT ADMINISTRATION. Each party will designate one of its

employees to serve as the Project Manager. The Project Manager for a Party may

be changed at any time by the Party and the Party may designate a temporary

substitute at any time. Each Party's Project Manager will be responsible for

coordinating the work performed by the parties to ensure that each Party meets

its obligations under this Agreement. Each Party's Project Manager shall also

serve as the primary contact for the respective designating Party and will be

responsible for maintaining communication between VIACELL and MILTENYL.

 

      [**]

 

2.6 MEETINGS. All meetings regarding the Development Program shall take place in

Bergisch Gladbach or Teterow, Germany or another mutually agreed upon location;

provided, however, that the Parties may mutually agree to meet by teleconference

or video conference.

 

2.7 MILTENYI RIGHTS. MILTENYI and its Affiliates shall have the right to

manufacture, use, sell, offer for sale, sell and import Cell Separation Kits

that are not certified as cGMP Cell Separation Kits. MILTENYI shall also have

the right to manufacture, use, sell, offer for sale, sell and import each of the

components of the Cell Separation Kit, whether they are cGMP or

 

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non-cGMP. MILTENYI shall further have the right to manufacture, use, sell, offer

for sale and import cGMP Cell Separation Kits that are certified as cGMP Cell

Separation Kits except that MILTENYI may not sell cGMP Cell Separation Kits for

expansion of Hematopoietic stem cells to a competitor of VIACELL without the

prior written permission of VIACELL. In the event VIACELL abandons its efforts

to develop and commercialize a product made using the cGMP Cell Separation Kit,

MILTENYI and its Affiliates shall have the right to manufacture, sell, offer for

sale, use, and sell cGMP Cell Separation Kit, including the right to use cGMP

Cell Separation Kit to manufacture cellular products for cellular therapy.

 

                    3. TREATMENT OF CONFIDENTIAL INFORMATION

 

3.1 CONFIDENTIALITY/RESTRICTIONS ON TRANSFER.

 

      3.1.1 CONFIDENTIAL INFORMATION. MILTENYI and VIACELL each recognize that

the other Party's Confidential Information constitutes highly valuable and

proprietary confidential information. MILTENYI and VIACELL each agree that

during the Term of this Agreement and the term of the Supply Agreement and for

five (5) years after the latter to terminate of those agreements, it will keep

confidential, and will cause its employees, consultants and Affiliates to keep

confidential, and shall not transfer to any Third Party, Confidential

Information of the other Party that is disclosed or transferred to it, or to any

of its employees, consultants and Affiliates, pursuant to or in connection with

this Agreement, without the prior written consent of the other Party and except

to the extent that disclosure, or transfer, is required in accordance with the

performance of this Agreement. Neither VIACELL, nor MILTENYI, nor any of their

respective employees, consultants and Affiliates shall use Confidential

Information of the other Party for any purpose whatsoever except as expressly

permitted in this Agreement. Notwithstanding anything contained herein to the

contrary, the Parties agree that with respect to production technology, QA, QC

and regulation information, such information shall remain confidential without

limit unless such information becomes part of the public domain through no fault

of the recipient of such information.

 

      3.1.2 NON-DISCLOSURE. Each Party shall take such action, and shall cause

its Affiliates and licensees and sublicensees to take such action, to preserve

the confidentiality of each other's Confidential Information as it would

customarily take to preserve the confidentiality of its own Confidential

Information, and in no event, less than reasonable care. Each Party, upon the

other's request, will return all the Confidential Information disclosed or

transferred to it by the other Party pursuant to this Agreement, including all

copies and extracts of documents and all manifestations in whatever form, within

sixty (60) days of the request following the termination of this Agreement;

provided that a Party may retain Confidential Information of the other Party

relating to any license or right to use Technology which survives such

termination and one copy of all other Confidential Information may be retained

in inactive archives solely for the purpose of establishing the contents

thereof.

 

3.2 DISCLOSURE REQUIRED BY LAW. If a Party is requested or required by subpoena,

court order, or similar process to disclose any Confidential Information of the

other Party, the parties agree that the Party required or requested to make the

disclosure will provide the other Party with prompt notice of such request(s) so

that the Party whose Confidential Information is required or

 

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requested to be disclosed may seek appropriate protective order and/or waive the

other Party's compliance with the provisions of Section 3.1.

 

3.3 EMPLOYEES AND CONSULTANTS. MILTENYI and VIACELL each represent that all of

its employees and the employees of its Affiliates, and any consultants to such

Party or its Affiliates, who shall have access to Confidential Information of

the other Party are bound by written obligations to maintain such information in

confidence and not to use such information except as expressly permitted herein.

Each Party agrees to enforce confidentiality obligations to which its employees

and consultants (and those of its Affiliates) are obligated.

 

3.4 PUBLICITY. Neither Party may publicly disclose the existence or terms of

this Agreement without the prior written consent of the other Party; provided,

however, that either Party may make such a disclosure to the extent required by

law. Such disclosure shall be on reasonable notice to the other Party and after

taking all reasonable steps to maintain confidentiality. The Parties, upon the

execution of this Agreement, will jointly prepare a press release and will